Supreme Court's ruling for college athletes would mean big business for endorsement startups

• College athletes are in court fighting for compensation, and entrepreneurs are watching closely.
• The Alston vs. NCAA supreme court ruling could decide the future of those opportunities.
• NIL rights for college athletes could spark a new market for startup endorsement agencies.

US Supreme Court justices gave individual scoldings to the NCAA for its defense of restricting compensation for college athletes in the first hearing for the Alston vs. NCAA case last Wednesday.

The Supreme Court's eventual ruling on that case, which focuses specifically on education-related benefits, could ultimately set a precedent for another anti-trust lawsuit against the NCAA currently in the pipeline: House vs. NCAA. That case directly addresses the issue of athletes receiving money by selling the rights to their names, images, and likenesses (NIL).

House vs. NCAA, filed last June, is expected to be tried in the Supreme Court this summer. The case is led by current Arizona State University men's swimmer Grant House and University of Oregon women's basketball player Sedona Prince.

House and Prince don't play sports that generate revenue like football and men's basketball, which are the sports leading the conversation for athletes getting direct compensation and revenue-sharing opportunities due to lucrative TV contracts and merchandising. However, Prince, in particular, has something that indicates there's plenty of revenue for her to claim as an athlete: 223,000 Instagram followers.

NIL endorsement rights would give business opportunities to all college athletes

Jason Bergman is the founder of MarketPryce, a startup service designed to connect athletes and influencers with potential endorsement partners. Bergman believes athletes with social media followings even half the size of Prince's could find endorsement deals no matter what sport they play or where they play it.

"We have a whole network of over 100 national businesses ready to partner with student-athletes," Bergman told Insider. "My bigger goal is to let an athlete go on to an app on their phone and connect with any business they want."

Bergman's service currently allows professional athletes to match with endorsement partners and negotiate deals based on the athlete's social media following. MarketPryce's current clientele comprises professional athletes, including Chris Bosh, Alvin Kamara, Kelley O'Hara, Christen Press, and Ray Lewis, looking for smaller-scale endorsements aside from the bigger deals their agents set up.

Bergman believes that if college athletes gain NIL rights, it could multiply the size of his business, unlocking tens of thousands of potential clients across the country.

"The cool thing with college fans is they feel like they know their athletes growing up," Bergman said. "That's what's cool about athlete marketing versus influencer marketing. An influencer's first job is to promote a product. An Athlete's first job is to play a sport, and they have fans because of it, so being able to tap into that base across the country, that's where the real value is for the companies we've talked to."

The courts could decide the future of NIL rights, but the outcome will come with risks and a necessity for guidance

Three other pieces of proposed federal legislation would enable college athletes to profit from their NIL. These include Rep. Anthony Gonzalez's "Student Athlete Level Playing Field Act," Sen. Cory Booker's College Athletes Bill of Rights, and Sen. Chris Murphy's "College Athlete Economic Freedom Act."

The recurring argument by prognosticators against each proposed bill is how NIL endorsements could distract college athletes from athletics and academics and how entrepreneurs could take advantage of undereducated athletes from poorer backgrounds.

Even proponents of NIL rights for student-athletes share those concerns.

Former NBA player and ESPN, CBS Sports, and Fox Sports analyst Len Elmore currently co-chairs the Knight Commission on Intercollegiate Athletics - a panel dedicated to reform in collegiate athletics with an emphasis on athletes' rights.

"Dreams and ideas of young people don't change over the generations, and when you start adding money into the mix, then that's the shiny object that distracts from the pursuit of education," Elmore told Insider. "That shouldn't be the focus. To me, that's ancillary to the main reason you're on campus ... but I also recognize that it's a right."

While services like MarketPryce sell themselves as a means for college athletes to create marketing partnerships, Elmore agreed there is a risk of being exploited by marketers. Additionally, college programs and boosters using NIL opportunities as a recruiting tool is another danger that Elmore believes could compromise the integrity of college sports.

"That's why you need the guard rails, you need the rules that are going to prohibit the institutions from being involved so that they can't use it as a recruiting tool," Elmore said. "The reason for compensation for name, image, and likeness, has to be based upon their popularity, based upon the marketplace that is desirable for having that athlete involved as opposed to artificially propping up the price so that you can recruit that athlete from somebody else."

The NCAA has made its own in-house rule change proposal that would do the same, which would place heavier restrictions on potential exploitation than the federal legislature. However, the NCAA opted to table the vote indefinitely. A major college sports commissioner said that the NCAA isn't expected to resume talks on those policy changes until their current battle in court is over, according to Matt Norlander of CBS Sports.